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South Africa-based Old Mutual Alternative Investments (OMAI) is set to launch a new pan-African affordable housing fund towards the end of 2021.

Old Mutual joint CEO Paul Boynton said that the fund would be targeting to raise between $300Mn - $500Mn.

He said affordable housing can remove the burden from fiscally stretched African governments adding that the fund could use economies of scale to achieve a compelling price point.

According to the <a href="https://www.theafricareport.com/48154/old-mutual-wants-to-create-an-african-affordable-housing-fund/" style="color: #ff6600;">African Report</a>, OMAI has completed preparations to launch the new fund in Kenya which has a housing shortfall of 2 million units.

Boynton added that the OMAI fund may also decide to invest across sub-Saharan Africa, with the likely exclusion of South Africa.

OMAI&rsquo;s plan involves the construction of new housing and conversion of existing structures for residential use, a strategy the firm has already implemented in South African cities Johannesburg and Cape Town.

The company will sell or rent residential housing in the new fund. The firm currently holds assets worth about $3.4bn under management in private equity and infrastructure investments which include Pulse Urban Properties, Crystal Park and CUF Properties in South Africa.

STANLIB Fahari I-REIT realized a net profit growth of 13% for the year ended 31 December 2018 which translates to KShs 193 Million boosted by net revaluation gains on its investment property of KShs 65 million.

“The portfolio’s market valuation was bolstered by the addition of a modern 300 seat capacity, 3-screen cinema at Greenspan Mall which will be commissioned in the second quarter of 2019 underpinned by a 10-year lease. Recent successful renewal of key tenant leases also contributed to the mall’s improved future cash flows and expiry profile and will counter the challenge of vacancies in the portfolio,” said the Fund’s Acting CEO Ms. Nozipho Makhoba.

However, despite the increase in net profit, distributable earnings declined by 14% to KShs 127.9 million from KShs 149.1 million in 2017 as a result of increases in vacancies. The smallest and single-tenanted property in the portfolio, known as Highway House, remained vacant for nine months in 2018 following the exit of the tenant at expiry of the lease. According to STANLIB, although the vacancy was immaterial, it put had a negative effect on the current year’s earnings.

Rental and related income increased by 11% to KShs 309.8 million while interest income decreased by 43% to KShs 56.4 million following the firm’s acquisition of an A-grade three storey office building situated in Lavington, Nairobi. The transaction was completed on 29 May 2018 with rental income from this property accruing from the date of the closing.

Property expenses increased by 13% to KShs 108.9 million when adjusted for the expenses from the new property acquisition. Most of these expenses are funded out of the service charge income. Irrecoverable withholding tax expenses also increased as more tenants were appointed as withholding tax agents by KRA in 2018.

This tax leakage at a subsidiary property level is expected to be resolved through the anticipated update of the tax legislation to expressly exempt REIT owned subsidiaries from income tax. The tax leakage contributed to the fall in distributable reserves by the REIT to KShs 13.5 million in 2018.

Fund management expenses decreased by 4% to KShs 130.2 million in line with the downward review of the REIT Manager’s fee which took effect from 1 July 2017 and was implemented for the full year in 2018. The recoupment of VAT input expense that had previously been capitalized to fund expenses in the past also contributed to the cost reduction.

As at 31 December 2018, investment property accounted for 90% of assets under management while the balance of the funds (i.e. KShs 386.6 million) was invested in cash and other instruments, affirming that the REIT portfolio is in compliance with the regulatory requirement to invest at least 75% of net assets in investment property.

During the release of the past year’s results, STANLIB Fahari I-REIT also laid out plans to grow its property portfolio which currently comprises four properties valued at a total of KShs 3.4 billion. The Fund’s strategy is to position itself as a strategic partner of pension schemes as well as insurance companies that are currently overinvolved in investment property and desire to rebalance their portfolios in line with the relevant pension and insurance regulations in Kenya.

Ms. Makhoba further announced that the REIT Manager’s Board recommended and the Trustee has approved a final dividend of KShs 0.75 per share which will see the distribution remaining flat year-on-year despite the reduced distributable earnings. This move underlines management’s confidence in the REIT’s current fundamentals as well as future prospects.

Mombasa County is planning a mega affordable housing scheme that will see the county invest KSh. 200 billion in the housing sector. Construction of the new housing will replace old government housing estates in locations such as Mzizima, Changamwe and Likoni Customs, where the first phase of the project will be.

The county government has scheduled 142 families for relocation to make room for the housing projects; these include 57 families from Mzizima near the Kenya Medical Training College, 25 from Likoni Customs and 60 from Changamwe.

Mombasa County Executive for Lands, Housing and Physical Planning Edward Nyale, told The Standard that the residents have already been served with notices to move out ahead of the project, which is due to start in two weeks’ time.

The Mzizima project will see the construction of 600 units on 14-storeys instead of the initial plan of 24 after a geotechnical survey revealed that the ground in Mzizima can only hold 14 floors while phase 2 of the project will see the construction of 15-storey duplexes, 14- and 21-floor apartments in Buxton Estate, Likoni.

The county will also build 12,000 houses in Tudor Mwisho, Tom Mboya, Kaa Chonjo, Khadija and Kizingo estates. According to the authorities, Mombasa County has a housing deficit of 380,000 units.

The county government intends to compensate the relocated tenants.

Mombasa County in plans to undertake

International travel-booking company Tourlane has compiled a top-50 list of the world's most environmentally-friendly gateway cities, placing Nairobi top in Africa. The Kenyan capital was also ranked 14th globally, ahead of Cape Town and Morroco’s Marrakech.

The study ranked cities based on used eight criteria giving each city a score out of 10 in each one for a total score out of 80.

The criteria include Public transport, Percentage of green space in a city, Train accessibility, Level of car ownership, Ratio of locals to tourists, Renewable energy, Recycling and Clean air based on World Air Quality Index.

Nairobi's high scores came in the categories of low car ownership, the use of renewable energy, and its low ratio of tourists to locals. The ranking says it is an excellent place to start a road trip.

The city’s total score which was 36.5 out of 80 includes zero scores in the categories of train accessibility and public transport- based on the length of the metro network and light rail network of the city.

The ranking by Tourlane places Nairobi above global cities like New York, Paris, Rio de Janeiro, Rome, Toronto, Amsterdam and a host others in aggregate eco-friendliness.

Overall, Berlin ranked as the best city for an eco-friendly getaway. Second and third places went to Vienna and Munich respectively.

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/nairobi-ranked-africas-most-dynamic-city/">Nairobi ranked Africa’s most dynamic city</a>

Nairobi ranked most eco-friendly city in Africa

Kenya’s only listed REIT, Fahari-I realized a net profit of KShs 193 million in 2018

Old Mutual Plans To Launch New Affordable Housing Fund In Kenya

Estate Cloud

Estate Cloud

Old Mutual Plans To Launch New Affordable Housing Fund In Kenya

By Estate Cloud - over 2 years ago - Kenya

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